Customer Lifetime Value

Find the ceiling for acquisition spend at your unit economics.

A free retention calculator from AMA Orlando, the American Marketing Association chapter serving Central Florida. It runs in the browser, needs no login, and captures nothing.

What you enter

• Average order value
• Purchases per customer over the lifetime window
• Gross margin
• Lifetime window in months

How it is calculated

• Total revenue per customer = average order value × purchases per customer
• Gross LTV = total revenue per customer × gross margin
• Gross profit per month = gross LTV / lifetime window in months
• Maximum sustainable CAC = gross LTV / 3, the 3:1 LTV to CAC rule of thumb

How to read the result

LTV sets the ceiling for acquisition spend rather than a target for it. Once customer acquisition cost creeps above a third of gross LTV, the unit economics degrade, and the fix is tighter targeting, higher prices, or better retention before more paid media.

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